NOT too long ago, the two of the largest economies in the world voted, either through elections or referendum, for a different kind of administration. It was a vote that was apparently based on the sentiment that capitalism had displaced many.
The average man, perhaps trapped in the middle-class income, felt that social upward mobility had reached its glass ceiling, and the system of “fair competition” was marred with inequality.
At the end of the day, a significant population of two of the most advanced economies demanded change in the way capitalist governments did business.
This article aims to address the question – does liberalisation truly equate to economic freedom? Does the capitalistic game require a relook and re-analyse to determine its fairness?
Principally, liberalisation is meant to create more opportunities – with negotiating economies deciding the point of equilibrium in which the policies are fair to all stakeholders.
This is done through the rigours of many rounds of discussion, taking into account all economic factors, advantages and disadvantages on all sides – with the negotiator relying on inputs f om a diverse pool of crosssectoral experts, based on quantifiable parameters.
However, the complication may arise when analysing non-quantifiable factors. These factors may be lost in translation, with respect to cultural and socio-economic peculiarities.
These complications have the tendency to de-contextualise the situational outlook leading to inaccurate representations during the negotiation phase.
Therefore, it is crucial that we quickly learn as a nation to look at such localised peculiarities in the process of gaining market access. This is because there are obvious inroads to globalised trade when barriers are removed between negotiating markets, but we must recognise all our disadvantages as they often seem rosier than meets the eye.
At the same time, we must also learn the localised cultural nuances of the markets in which we want to penetrate, which may render us at a disadvantage, despite our competitiveness in our quality, cost or delivery.
For example, local sentiment is a cultural nuance that may often be overlooked. Many economies, despite their seemingly open markets, place a higher regard for the support of local products, and willing to pay higher if it is made locally while some economies are the complete opposite. Others may opt for ecofriendly or localised “ethical” sources as products of choice, changing the usual science of demand and supply.
An unmistakable fact is that a civilisational advantage of an entire century or two is a massive obstacle for developing nations to keep up with. While the world moves towards a globalised, borderless world, trade can only be free when the “equal” playing field is fair for all.
Furthermore, exposure plays an important role in the development of talent within society. For instance, those within developed nations have the advantage of working on highly advanced projects, rubbing shoulders with a large pool of experts – a technical, psychological and cultural experience, which is not as accessible to those in developing nations.
Therefore, the challenge of creating critical mass of talent in itself is a disadvantage for developing nations, in playing the field on equal grounds as their developed counterparts.
To be fair, the “challenge” of redefining liberalisation is not something unique to our country alone. With the advent of the fourth industrial revolution, the norms of doing business and creating job opportunities are changing constantly.
In fact, the dynamic global shifts of industry 4.0 are creating new comparative advantages within the global economy.
While it is indeed important to look at our comparative disadvantages, it is not meant as a justification of our position, but rather a means of alleviating our shortfalls.
The National Policy on Industry 4.0 (Industry4WRD) is Malaysia’s call for digital transformation of the manufacturing sector and its related services. With that, the government has created a clear path towards ensuring that Malaysian businesses have the leverage in equalising our comparative advantages.
Most importantly, the unquantifiable disadvantages mentioned in this article must come about through a complete societal transformation – one that moves parallel with industry development and seeping into primary education, social engineering and cultural development.
As a nation at the edge of its last step of advanced nation status, we must not just practise – but instil in others – the motivation to continuously improve.
Let us eliminate wasted motion, pool our experience and turn our shortfalls into advantages. The world may challenge liberal economics, but it should not stop us from liberalising ourselves from disadvantage.
The writer is the chief executive officer of Malaysia Automotive institute.